On 25 June 2025, the Financial Conduct Authority (FCA) published Discussion Paper 25/2 – Mortgage Rule Review: the future of the mortgage market (DP25/2).

Purpose

The purpose of DP25/2 is to launch a public conversation on the future of the mortgage market and sets out a discussion on the trade-offs and risks that changing the FCA rules would entail.

Possible measures that the FCA set out include:

  • Revising the responsible lending rules to support wider access to sustainable home ownership. The FCA considers the challenges faced by groups who may be more likely to struggle to pass current approaches to affordability assessments, including first-time buyers, the self-employed, and those with variable incomes. The FCA also sets out potential methods of assessing affordability, including a rent-based approach. The FCA seeks views on how it can improve the treatment of survivors of economic abuse and coercion and considers the implications of climate change.
  • Ensuring the regulatory framework, and the market, are prepared for anticipated increases in demand for later-life lending. The FCA notes that any problems in the later life lending market are likely to get worse if not tackled now. And if it fails to capitalise on opportunities for responsible innovation, it risks the market being unable to cope with the needs of future generations of mortgage borrowers.
  • Introducing more flexibility to promote consumer understanding, information needs and innovation. The FCA considers how its rules on advice, selling standards and information disclosure can help ensure better customer journeys and enable innovation. The FCA also asks for views on how it can support innovation in the mortgage market more broadly.
  • Rebalancing the collective risk appetite in mortgage lending including trade-offs and risk that this could lead to. The FCA considers the wider argument for rebalancing the collective risk appetite, across itself, firms, consumers and government, in the UK mortgage market. It then explores in more detail some of the trade-offs that need to be considered if the collective risk appetite were to shift, including between increased mortgage access, possible house price inflation and the potential for greater defaults. The FCA also considers the trade-offs involved for consumers in renting or buying.

Next steps

The deadline for comments on DP25/2 is 19 September 2025.